In March 2020, the Families First Coronavirus Response Act (FFCRA) was signed into law to help companies offer paid sick leave and unemployment benefits caused by COVID-19. Initially the FFCRA focused on employers withW-2 employees to help them weather the economic impact caused by the pandemic.
In December 2020 Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which expanded the FFCRA to cover not only employers, but the self-employed. Thanks to the FFCRA expansion self-employed individuals, freelancers, independent contractors, and gig workers are now eligible for tax credits that pay you back for the time you would’ve normally spent earning money that was lost because of COVID.
The FFCRA is federal legislation passed in response to the COVID-19 pandemic. It provides paid sick leave, free COVID-19 testing, food assistance, unemployment benefits, and stipulates employer-provided health insurance protection. For self-employed individuals, it offers equivalent coverage via tax credits that can be claimed on your income tax return, effectively reimbursing you for periods of sick leave due to COVID-19.
The total FFCRA Tax credit can be up to $32,200 and is based on your self-employed net earnings in 2020 and 2021.
To calculate your FFCRA credit, we use your daily average of self-employment income (this is your net earnings for the taxable year divided by 260) and the amount of self-employment work missed due to COVID-19 related issues. This allows the IRS to estimate how much you lost in wages for every day you were not able to work.
Initially the FFCRA focused on employers with W-2 employees. While the CARES act was passed later that same year with the expansion to provide Tax Credits to the self-employed, it was not widely publicized. Research shows over 80% of self-employed individuals are unaware they’re entitled to the FFCRA tax credits.
The PPP (Paycheck Protection Program) and FFCRA (Families First Coronavirus Response Act) are two distinct initiatives responding to the economic impact of the COVID-19 pandemic. PPP assists small businesses by providing loans, with the potential for loan forgiveness. FFCRA is not a loan but a credit on taxes individuals have already paid. While PPP supported businesses, FFCRA focuses on supporting individuals.
The amount you receive depends on your average daily self-employment income and the number of days you missed self-employed work due to COVID-related issues, including government quarantine orders, self-quarantine, COVID-19 symptoms and seeking medical diagnosis.
The credit for the childcare portion is calculated by multiplying the number of days on leave and taking whichever amount is smaller:
• Your average daily self-employment income of year or:
The credit missing self-employment work due to a personal COVID-related issue or due to taking care of another person is calculated by multiplying the number of days on leave and taking whichever amount is smaller:
• ⅔ of your average daily self-employment income or:
The Adesso360 portal walks you through these simple steps and calculates your maximum FFCRA tax credit.
The average Adesso360 customer has received an FFCRA refund of $9,400.
The IRS will send you a check for your 2020 and/or 2021 FFCRA tax credit to the mailing address associated with your Adesso360 account. Please note that if you have any outstanding tax liabilities, the refund will first be used to offset the tax balance.
It can take up to three weeks for the IRS to acknowledge the acceptance of your FFCRA credit application and up to 20 weeks from that acceptance to receive your refund via check or direct deposit.
Yes, the deadline to amend your 2020 and/or 2021 tax return for claiming or adjusting FFCRA credits is three years from the original due date of the return or within two years from the date you paid the tax, whichever is later. The deadline for filing for the FFCRA tax credits for your 2020 tax return is due on April 15, 2024 and your 2021 tax return is due on April 15, 2025.
FFCRA is a tax credit not a loan. It is also not considered a grant as it’s a refund of taxes you’ve already paid. The tax credits are designed to cover the same types of expenses that mandatory paid leave would cover for employees. If you're sick or caring for someone due to COVID-19, or you're experiencing conditions that prevent you from working, these credits aim to compensate you for the income you have lost.
Filing for the FFCRA tax credit will not have any impact on filing your 2023 yearly income taxes. To receive FFCRA tax credits, our team of CPAs will amend the taxes you have already filed during the years of 2020 and 2021.
To claim the FFCRA tax credits you will need to determine your eligibility and amend your 2020 and/or 2021 tax returns and their supporting schedules. To amend these returns, it is recommend to use a Certified Public Accountant (CPA) to obtain the best results. This can take countless hours and funds. Or, click the get started blue button in the top right corner of your screen, answer the pre-qualification questions and let Adesso360 do it for you! Our team of CPAs have created the fastest, safest, and easiest tool for self-employed individuals and sole proprietors to claim the federal FFCRA tax credits you deserve.
To qualify for the FFCRA, you must meet the following criteria:
To qualify for FFCRA tax credits you must have missed self-employment work due to COVID-related issues. If you were unable to work because of one of the following reasons, you may be eligible:
The FFCRA covers the days you were unable to perform self-employment work during the time period of April 1, 2020 - September 30, 2021.
Here is a breakdown of the amount of days you could be eligible.
Childcare related time off - up to 110 days
Yourself or loved one - up to 20 days
A self-employed person in the United States, as defined by the Internal Revenue Service (IRS), is generally considered someone to who the following applies:
The Adesso360 platform is designed to assist the sole proprietors, independent business owners, 1099 contractors, freelancers, gig workers, and single member LLCs. We also work with individuals across all industries, including: realtors, estheticians, hair stylists, taxi drivers, financial consultants, graphic designers, event staff, construction workers.
You can still qualify for the FFCRA tax credit even if you received unemployment benefits. However, you cannot claim the days you received unemployment benefits as days you were not able to work due to COVID-19 related issues.
You may still be eligible to claim FFCRA tax credits as long as you earned self-employment income in addition to your W2 salary during 2020 and/or 2021. If you are also a W2 employee and your employer filed for FFCRA credits on your behalf, you may not be able to utilize the Adesso360 platform.
If you receive paid leave benefits as an employee, it may affect the amount of tax credit you can claim as a self-employed individual under the FFCRA. You cannot claim a double benefit for the same period. However, if your situation as an employee doesn't provide full coverage, there might be potential to claim additional credits based on your self-employment income.
Unfortunately, if you have already received Sick & Family Leave credits for 2020 or 2021, you do not qualify for FFCRA tax credits through the Adesso360 portal. If you believe you might be entitled to more sick & family leave credits, we encourage you to speak with a CPA or Tax attorney.
Adesso360 is an advanced, first-of-its-kind platform designed by tax experts to assist self-employed individuals (independent contractors, gig workers, freelancers, etc.) claim the FFCRA tax credits they deserve. We take care of amending your tax returns and submitting your application to the IRS, granting you valuable time to focus on what matters most - growing your business.
Yes, if you missed self-employment work that you would have normally worked on a weekend, then you can claim weekends as days missed.
Yes, you may qualify for taking care of a child other than your own under the “Caring for others” section of our portal.
Yes, if the physical location where your child received instruction or care was closed, the school or place of care is “closed” for purposes of paid sick leave and expanded family and medical leave. This is true even if your child is still expected or required to complete assignments.
Positive net earnings are a requirement from the IRS to qualify for the FFCRA income tax credit. Positive net earnings indicate taxable income against which a credit can be applied. We understand the Covid-19 pandemic effected everyone globally. If you did not have positive net earnings in 2020 because of Covid-19 restrictions, we may use your 2019 net income.
Adesso360 does not require your 2020 and or 2021 tax return submission. Our automated process was designed to make the entire FFCRA tax refund process simple and easy. We fully take care of amending your tax returns and submitting your application to the IRS.
Please see Who Qualifies for the FFCRA tax credits?
Additionally, Adesso360 can only amend e-filed returns. If your 2020 and 2021 tax returns were paper filed, please reach out to your financial advisor for the next steps.
The Adesso360 processing fee is 20% of your total refund. This fee covers the considerable expenses associated with retrieving your official tax records, the work of our CPAs in calculating and filing your paperwork, and the legal fees ensuring compliance with all of the relevant tax laws. The Adesso360 fees can be easily paid via PayPal at the time of filing. Whether you pay in full or finance over time, you can use any credit or debit card affiliated with your PayPal account.
For fees equalling $1,500 or less, choose to pay in (4) interest free installments starting at the time of filing, with (3) subsequent repayments every 15 days.
For larger refunds with processing fees greater than $1,500, you can finance your payments monthly with PayPal directly. The “Pay Monthly” installment loan application requires users to enter certain personal information, including address, the last 4 digits of Social Security Number or Individual Tax Identification Number, date of birth, annual gross income, and phone number/type. Applying for “Pay Monthly” will not impact your credit score. If your “Pay Monthly” Installment loan is approved and used, PayPal may report to credit reporting agencies. This will include loan amount and payment history, and can have an impact on your credit score. With this option you may select to pay over the course of 12, 24, or 36 months. Availability depends on your state of residence and you must be at least 18 years of age. You must also have a PayPal account in good standing or open a PayPal account to apply. If you do not see monthly option available on your account, please contact PayPal directly.
Please note: It is not required to have a PayPal account to make a payment upfront, you can use your debit card or credit card at guest checkout. To make a payment in 4 installments or monthly, you will need to sign into your PayPal account and create an account if you do not have one.
Disclaimer: If you do not receive your tax credit for any reason, we will reimburse you any fees paid.
Absolutely. To pay the Adesso360 processing fee without logging into a Paypal account, you may select the “Pay Now” option and enter your debit or credit card information within the requested fields.
Pay Monthly is one of our secure PayPal payment options for larger refunds and processing fees greater than $1500. This option allows you to pay your Adesso360 fee over the course of 12, 24, or 36 months. The "Pay Monthly" installment loan application requires users to enter certain personal information, including address, the last 4 digits of Social Security Number or Individual Tax Identification Number, date of birth, annual gross income, and phone number/type.
Applying for “Pay Monthly” will not impact your credit score. If your "Pay Monthly" Installment loan is approved and used, PayPal may report to credit reporting agencies. This will include loan amount and payment history, and can have an impact on your credit score. Availability depends on your state of residence and you must be at least 18 years of age. You must also have a PayPal account in good standing or open a PayPal account to apply. If you do not see a monthly option available on your account, please contact PayPal directly.
Pay in 4 is one of our secure Paypal payment options that allows you to split your Adesso360 fee into (4) interest free installments. Please note, this payment option is only available if your Adesso360 processing fee is under $1,500. If your Adesso360 processing fee is over $1,500, the Pay in 4 option will not be available for you.
Yes, you have the flexibility to split your payments between any two credit cards linked within your PayPal account. You must add a debit or credit card to your PayPal account prior to selecting your payment.
The IRS defines a dependent as either a qualifying child or relative of the taxpayer. The relative can be your child, stepchild, foster child, sibling, parent, grandparent, grandchild, aunt, uncle, niece, nephew, or certain in-law relationships.
A child must have lived with you for more than half of the tax year. Temporary absences, such as for education or medical care, are generally counted as periods of living with you. You must have provided more than half of the relative's total support during the tax year. The relative’s gross income must be below a certain threshold determined annually by the IRS (subject to change). It's important to note that these are just general guidelines, and there may be additional rules and exceptions. The IRS provides detailed information in publications such as IRS Publication 501.
A Dependent must be
IRS Form 1040 is the standard individual income tax form in the United States, used by taxpayers to report their annual income and calculate their tax liability. To file for the FFCRA tax credits, Adesso360 will amend your previously filed IRS Form 1040.
IRS Form 1040X is the form used for amending your previously filed individual tax return. To file for the FFCRA tax credits, Adesso360 will amend your previously filed IRS Form 1040 by completing Form 1040-X.
Schedule SE is a tax form used by self-employed individuals to calculate the self-employment tax owed. This tax covers Social Security and Medicare taxes for individuals who work for themselves.
Although all businesses may qualify for the FFCRA tax credits, Adesso360 is only able to process self-employed individuals at this time. In order for a self-employed individual to qualify for the FFCRA tax credit, they must have self-employment income listed on line 6 of the Schedule SE.
Schedule C is a tax form used by sole proprietors, single-member LLCs, and certain other self-employed individuals to report their business income and expenses. The form is filed as part of the individual's personal income tax return (Form 1040), and it helps calculate the net profit or loss from the business, which is then used to determine the individual's overall taxable income. Net income (line 31) from the Schedule C is used to calculate self-employment income on line 2 of Schedule SE (Form 1040).
This does not appear in the application. However, it is important to know that Schedule C feeds into the overall calculation of self-employment income on Schedule SE (Form 1040).
IRS Form 7202 is a tax form used to claim the Families First Coronavirus Response Act (FFCRA) credits for self-employed individuals. This form must be completed to calculate the total amount of FFCRA credit self-employed individuals qualify for COVID-19-related reasons.
IRS Form 8821 is the Tax Information Authorization form. This form is used by taxpayers to authorize the release of your tax information to a third party, such as a tax professional, for a specified period. Once signed, Form 8821 allows Adesso360 to pull your required tax information needed to accurately calculate your FFCRA credit and amend the 2020 and/or 2021 tax returns to file for your FFCRA tax credits. This form does not authorize the designee to represent the taxpayer before the IRS; it only allows Adesso360 to receive and inspect confidential tax information. If representation before the IRS is necessary, a separate form, such as Form 2848 (Power of Attorney and Declaration of Representative), would be required.
All customers who filed the 2020 and/or 2021 tax returns with a Married Filing Joint status are required by the IRS to have both spouse’s signatures on the amended tax returns prior to acceptance. Adesso360 also requires both spouses to verify their identities. However, if you were married and filed as Head of Household or Married Filing Separate, no information or signature is required by the IRS or Adesso360 from a spouse.
If you have open tax liabilities your FFCRA credit will be applied by the IRS to your existing balance. Any remaining FFCRA credit will be sent to you via check.